Land monetisation to fuel SD Guthrie

PETALING JAYA: SD Guthrie Bhd is complementing its traditional plantation operations with a high-value industrial development strategy, marked by its latest land disposal in Bukit Kerayong, Selangor.

Analysts said the planter’s two conditional sale and purchase agreements to dispose of 1,021.9 acres of freehold land for a total cash consideration of RM798.3mil to Kerayong Development Consortium Sdn Bhd (KDC) should see SD Guthrie recognise a substantial one-off after-tax disposal gain of RM408mil or 5.9 sen per share.

KDC is a 50:50 joint venture between SD Guthrie and Sime Darby Property Bhd.

The deal is expected to be finalised in the second half of financial year 2026.

SD Guthrie has announced cumulative after-tax disposal gains of at least RM932mil for the 2026 period alone, providing stronger earnings visibility, improving cash generation, and strengthening the balance sheet.

“We also see further upside from its growing pipeline of industrial projects, which should support recurring land monetisation and long-term value creation,” CIMB Research noted.

The land transactions also signal a strategic pivot where land monetisation is evolving from a series of one-off events into a recurring earnings driver for SD Guthrie as exemplified by the KDC deal.

CIMB Research maintained a ‘hold’ rating on SD Guthrie with a higher target price (TP) of RM6.71 a share (from RM6.47).

BIMB Research maintained a ‘buy’ call on the planter with a higher TP of RM7.50 a share (from RM6.90).

By maintaining a 50% interest in the KDC development platform, SD Guthrie retains exposure to potential future development earnings and the long-term growth of the industrial and logistics corridor.

According to CIMB Research, the KDC deal will reduce pro forma gearing from 0.24 times to 0.21 times and has prompted a 15% increase in its financial year 2026 net profit forecast for SD Guthrie to about RM3bil.

BIMB Research noted the KDC land deal should see SD Guthrie’s net gearing improve to 0.32 times. The land disposal involves only 0.07% of SD Guthrie’s planted area, which means the impact on core upstream plantation earnings will be immaterial.

CIMB Research maintained a ‘hold’ rating on SD Guthrie with a higher target price (TP) of RM6.71 a share (from RM6.47).

Meanwhile, BIMB Research maintained a ‘buy’ call on the planter with a higher TP of RM7.50 a share (from RM6.90).